Many in the business community have criticized Canada for being too fixated on U.S. trade initiatives and not aggressively pursuing more trade and investment opportunities with other countries. As a result, its overall global competitiveness has suffered. Canada recently recorded its first trade deficit in over 30 years which was blamed on falling oil prices and also directly linked to the struggling U.S. economy. In a recent visit to Canada, President Barack Obama gave assurances that he is committed to free trade and open borders. He reaffirmed his pledge to rework NAFTA, but stressed that the current economic crisis may delay such matters. If anything, the trade deficit that Canada posted, illustrates the need to lessen its dependency on the U.S. and further expand its trade portfolio.

On January 26, 2008, Canada signed a free trade agreement with the European Free Trade Association (EFTA) which consists of the countries of Norway, Switzerland, Liechtenstein, and Iceland. The Canada-EFTA trade agreement is basic in nature and is not as comprehensive as NAFTA. It does not include any new substantial commitments in areas of investment, services or intellectual property. There are concerns about the negative impact the trade agreement could have on Canada’s shipbuilding and agricultural sectors. The NDP is calling on the government to exclude the shipbuilding industry from the trade agreement. These concerns could delay ratification of the trade accord. The Conservative government is emphasizing the importance of expanding and not restricting trade, especially considering the current economic climate. A Canada-EFTA free trade agreement would give Canadian businesses a foothold in the heart of Europe, thus setting the stage for a proposed Canada-European Union (EU) economic trade deal.

Canada and the EU have engaged in preliminary discussions that could lead to deeper economic integration. There are reports that negotiations on a Canada-EU trade agreement, which would exceed NAFTA, could begin in May of this year. Newfoundland and Labrador Premier Danny Williams recently withdrew his support for upcoming negotiations, believing that the federal government would not act in his province’s best interests. According to Williams, assurances that a Canada-EU trade agreement would include protection for measures such as the Atlantic Accords and the Fish Inspection Act, have not been adequately met. He is also concerned about high fish tariffs, foreign overfishing and the EU’s plan to ban seal products. These issues would have to be resolved before full-scale negotiations could begin, as the EU has stressed that any such trade agreement with Canada would require full provincial governmental participation.

Canada is in the midst of playing catch-up and is attempting to secure a greater share of growing economic markets in India and China. The Canadian government has been working towards closer trade and investment cooperation with India. They have signed an agreement that will create the framework to further expand agricultural trade between the two countries. Canada is also waiting on India to finalize the text on a bilateral Foreign Investment Promotion Agreement, with hopes of a more comprehensive trade deal in the future. Many feel that Canada needs to further engage trade and investment opportunities with China as well; otherwise it risks further falling behind other nations who are also competing for a share of the Chinese market. In 2007, 2% of Canadian exports were sent to China and its direct foreign investment in the country accounted for only 0.3%. China and India represent vast potential trade and investment opportunities for Canada which can no longer be overlooked.

Under Prime Minister Stephen Harper, bilateral trade initiatives have accelerated. He has promised to place more focus on the Americas and further strengthen bilateral cooperation in the hemisphere. Trade deals with Peru and Colombia have been signed and need to be ratified. Canada is attempting to establish a greater presence in Brazil as the two countries have signed an Agreement for Cooperation on Science, Technology and Innovation. Canada is due to begin a third round of negotiations with Dominican Republic on a bilateral free trade agreement. There are also discussions underway with Panama, Guatemala, Honduras, Nicaragua, and El Salvador. With all the bilateral and regional trade agreements that have been signed or are being pursued in the hemisphere, all these deals combined could eventually be used to facilitate a larger multilateral agreement such as the FTAA.

It is clear that Canada must lessen its dependency on the U.S., but if future free trade deals are based on the failed NAFTA model, they could prove costly. A steady diet of globalization is being offered as a solution to Canada’s economic woes. While there is a need to expand Canadian trade horizons, at the same time there is a push for further North American economic integration. Former Minister of International Trade, David Emerson, is calling for closer Canada-U.S. ties in the form of a customs union, further integration on regulatory matters, along with updating NAFTA to include labour mobility. He is also recommending that Canada advocate a North American security perimeter. Although under its current structure the Security and Prosperity Partnership might be dead, it appears as if plans for a North American Community or rather a North American Union, are still very much alive.

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Dana Gabriel is an activist and independent researcher. He writes about trade, globalization, sovereignty, security, as well as other issues.